This latest auction will bring the federal government’s total NTB borrowing to nearly N3 trillion over the past two weeks.

Conducted on behalf of the Debt Management Office (DMO), today’s auction shows the government’s increasing reliance on local investors to fund its operations and manage growing debt obligations.

The Breakdown: What is on Offer Today?

The government is offering three types of Treasury Bills, using the Dutch Auction system where interest rates (yields) are set by investor demand.

• 91-Day Bills: N100 billion
• 182-Day Bills: N150 billion
• 364-Day Bills: N800 billion

The focus on the 364-day (one-year) bills shows both the government and investors favour longer-term commitments, especially as interest rates remain high.

N3 Trillion in Two Weeks: The Timeline

If fully subscribed, today’s auction will bring March’s total NTB borrowing to N2.99 trillion.

1. March 4: N1.01 trillion raised (Rates jumped to 16.73% for one-year bills).
2. March 11: N933.92 billion raised (Rates remained stable).
3. March 18 (Today): N1.05 trillion target.

Experts warn that this isn’t just routine business. It shows a system under pressure. Funds raised are largely to roll over maturing debt and cover the 2026 budget deficit, estimated at N20.12 trillion.

“This is not routine financing. It is a signal of pressure, a signal of urgency, a signal of a system stretched,” said Blakey Okwudili Ijezie, convener of Blakey’s National Economic Conference.

“Interest rates will rise because such volumes cannot be absorbed cheaply. When rates rise, businesses borrow less, expansion slows, and jobs are threatened,” he asserted.

What you should know

Large government borrowing usually drives up rates. While this benefits savers, it increases the cost of loans for businesses and individuals.

Banks may prefer high-yield government bills over lending to small businesses, limiting private sector growth.

Signs of Fiscal Pressure Analysts, including Olubunmi Ayokunle of Agusto & Co., note that delays in releasing capital allocations suggest limited government finances.

“If funds are mainly to roll over maturing obligations, then the net impact on total borrowing may not be as significant as it appears,” said Olubunmi Ayokunle, head of Financial Institutions Ratings at Augusto & Co.

With over 70% of its deficit now funded domestically, the federal government’s borrowing spree is a reminder that the cost of credit for Nigerians is likely to remain high for a while.

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DataPro Limited upgraded First Asset Management’s investment management rating to “AA” from “AA-”, while Agusto & Co affirmed the firm’s “A+(IM)” investment management rating.

In addition, Agusto & Co upgraded the rating of the First Asset Money Market Fund to “A+(f)”, from “Aa (f)”, signalling increased confidence in the fund’s credit quality and management strength.

The ratings reflect First Asset Management’s solid performance track record, the strength and support of its parent financial group, as well as the firm’s enhanced governance and investment oversight structures.

According to the company, it has strengthened its governance framework by establishing clearly defined investment and risk committees led by experienced professionals.

These committees play a critical role in guiding strategic investment decisions while ensuring disciplined risk management across its portfolios.

The firm also noted that its team of seasoned investment professionals continues to actively monitor market developments, manage portfolio risks, and identify opportunities that support long-term value creation for investors.

To further reinforce investor confidence, First Asset Management has enhanced its risk management and compliance framework, aligning its operational processes with global best practices in asset management.

Independent assessments by DataPro Limited and Agusto & Co highlighted the company’s commitment to responsible asset management, strong corporate governance, and operational systems designed to support stable and sustainable long-term investment performance.

First Asset Management said the improved ratings underscore its focus on delivering value to investors through disciplined investment strategies, transparency, and robust oversight.

The company offers a range of investment solutions tailored to different financial goals, from individuals beginning their investment journey to experienced investors seeking portfolio growth and long-term wealth creation.

With the ratings upgrade, First Asset Management reaffirmed its commitment to helping clients build wealth through professionally managed investment products designed to navigate market volatility while capturing growth opportunities.

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The Company has been assigned a Long-Term Rating of A and a Short-Term Rating of A1, both with a Stable Outlook.

This upgrade reflects stronger confidence in Stanbic IBTC Insurance’s financial resilience, governance standards, and long-term sustainability.

The improved ratings underscore the Company’s commitment to robust risk management, operational discipline, and its strong capacity to meet obligations to policyholders.

Agusto & Co. also cited Stanbic IBTC Insurance’s sound liquidity position, prudent business strategy, and the strategic backing it receives as part of Stanbic IBTC Holdings.

As part of its growth strategy, Stanbic IBTC Insurance continues to expand its retail footprint across Nigeria, enhancing access to life insurance solutions and deepening its presence in key markets. This expansion supports its mission to serve individuals, families, and businesses with reliable and accessible insurance offerings.

Commenting on the rating upgrade, Akinjide Orimolade, chief executive of Stanbic IBTC Insurance, stated:

“We are delighted with this upgrade as a reflection of our progress and the trust we’ve earned from stakeholders. Our focus remains on delivering reliable protection, exceptional service, and enduring value to both policyholders and other stakeholders. This recognition motivates us to uphold the highest standards of financial discipline, service excellence, and integrity.”

In terms of claims settlement, Stanbic IBTC has consistently demonstrated its commitment to prompt and efficient payout to policyholders and annuitants. Since its establishment in 2021, the company has settled over 2,000 claims, amounting to more than ₦1.8 billion in cash.

Additionally, it has paid over 16 billion in annuities to more than 4,900 retirees, reaffirming its dedication to delivering reliable and timely benefits.

Stanbic IBTC Insurance remains committed to maintaining its strong financial position, driving customer-centric innovation, and consistently delivering on its promise of security and peace of mind for Nigerians.

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This rating showcases Baobab Nigeria’s strong financial standing and prudent management practices in Nigeria’s competitive microfinance industry.

This rating which was announced on 3^rd February 2025 highlights Baobab Nigeria’s key strengths, a solid liquidity profile, and an experienced management team.

These factors position Baobab Nigeria as a reliable financial institution dedicated to serving Nigeria’s growing microfinance sector.

Baobab Nigeria has demonstrated resilience and adaptability despite the challenging macroeconomic environment characterized by high inflation and intense industry competition. The bank is actively developing new products tailored to the evolving needs of its customers, ensuring that financial solutions are inclusive, flexible, and aligned with market demands.

Commenting on the rating, Eric Ntumba, AG CEO, Baobab Nigeria

“We are pleased with Agusto & Co.’s affirmation of our ‘Bbb+’ rating, which showcases our commitment to maintaining financial stability and operational excellence. Our strategic focus remains on strengthening our capital base, optimizing our funding structure, and enhancing efficiency to better serve our customers.”

“This is a step further to the impact we are looking to make in the financial services sector. Our services and offerings are strategically focused on improving lives and the economy at large and we are excited to see our impact being recognized.” Eric added.

The bank constantly implements measures to reinforce its financial position and leverages technology and digital solutions to drive operational efficiency, ensuring seamless financial services for its customers.

Baobab Nigeria continues to play a pivotal role in Nigeria’s financial inclusion drive, providing accessible and sustainable financial solutions to individuals and small businesses. This rating further reinforces the bank’s credibility and long-term growth prospects.

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This makes the bank the best rated in Nigeria’s Non-Interest Banking (NIB) space.

According to the bank, the latest rating, which is a notch up from the Bank’s previous rating, comes in recognition of the bank’s high quality balance sheet and robust earnings capacity.

Commenting on the rating, Hamid Joda, CEO of the non-interest lender, described the improved rating by Agusto & Co as a clear demonstration that TAJBank has continued to prioritize necessary risk management and operational controls, with clear focus on quality processes related to first class standards, management, and administration lifecycle.

He said,

“The latest rating of TAJBank by the reputable agency has, once again, confirmed the management’s commitment to world-class standardization of the bank’s operations, especially in terms of ensuring high operational standards and service provisions for our growing customers on a sustainable basis.

“As we have consistently assured our customers and industry regulators, our primary goal is to deliver cutting edge quality and operational systems and services as well as protect the interest of our customers and by so doing, retain TAJBank as the leader in the NIB subsector of the banking system and make it the preferred choice for value-conscious customers in non-interest banking services in Nigeria and globally.

“Our message to both current and potential customers out there is that with TAJBank, they can be rest assured of safety of their transactions and the bank’s readiness to support their business and other endeavors in line with our operational mantra, which says our interest is only the customer”, Joda assured.

In his remarks, Sherif Idi, the bank’s executive director, , said that the latest TAJBank ratings had again reaffirmed TAJBank as a system and operational-conscious and standard-drive non-interest lender that today remains at the leading edge of the NIB sub-sectoral market.

He explained that the bank was determined to retain this position in the years ahead by prioritizing investment in human capital, innovative technologies and solutions in order to continue to serve its customers better and add value to the businesses or socioeconomic well-being.

“Agusto & Co assigns credit risk ratings to various entities, including financial institutions, companies in the industrial and commercial sectors, state governments, mutual funds, asset management companies, leasing companies and pension funds.

“The firm’s rating is monitored and can be revised upwards or downwards depending on changes that occur in the organization during the validity period of the rating.”

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With $20.1 billion in remittances in 2021, Nigeria was the second-highest recipient in Africa, trailing only Egypt ($28.3 billion).

Although Egypt and Nigeria received over half of all remittances to Africa, the rise in inflows into Egypt remained robust, at double digits (16%), while growth in Nigeria slowed to 3%.

Remittances have proven to be positively correlated with the income of immigrants and economic conditions in the sending countries.

The slow economic recovery and cost of living crises that confronted many developed economies in 2022 were indicative of this trend and constrained remittance flows into Nigeria.

This was further exacerbated by the implementation of capital controls and other unpopular policies by the Central Bank of Nigeria (CBN), which restricted inflows through official channels.

Remittances from the diaspora have played an increasingly essential role in Nigeria’s economy, serving as an important source of foreign exchange earnings and a catalyst for economic growth and development. As more Nigerians, discouraged by the country’s gloomy economic conditions, look overseas for opportunity, their remittances will continue to play, a crucial role in sustaining the Nigerian economy.

The growth of these funds has been exceptional, empowering dependents to meet their basic needs, pursue education, access healthcare, and embark on entrepreneurial endeavours.

Mass Emigration (japa Wave) – A double-edged sword

Nigeria has been dealing with the challenge of emigration and brain drain for decades as a result of the rising number of people fleeing in search of greener pastures amid the country’s dim economic prospects. This growing trend in emigration has been informally tagged “Japa” – a Yoruba word that translates to “flee or run away”.

As more countries, particularly highly sought-after destinations, have become more welcoming of immigrants as a result of the global labour shortage experienced post-COVID-19, there are now more opportunities than ever for migrants seeking employment in environments with improved economic and living conditions.

However, this widespread exodus has left many businesses severely understaffed, which has stunted the expansion of a variety of industries and lowered tax revenues for the government. Nonetheless, remittances from the diaspora provide foreign exchange and capital injections to stimulate economic activity. Remittances are also often utilised to support the livelihoods of dependents back home.

Agusto & Co. believes that the surge in emigration witnessed in 2022 is yet to translate to a commensurate rise in remittances as the majority of the emigrants are students who will not be able to fully join the labour force in their host countries until mid-2023.

Increased Channels of Remitting Funds – Surge in Money Transfer Operators (MTO)

In recent years, the rapidly growing global adoption of mobile devices has driven the use of digital technology in remittance services and cross-border payments. COVID-induced movement restrictions have significantly amplified the utilisation of digital money transfer channels. It is estimated that in 2021, following lockdowns and border closures across the world, mobile phone payments spiked by 48%.

Furthermore, there has been a shift to Fintech MTOs, which provide users with a faster, more convenient, and cost-effective remittance experience. Traditional MTOs have begun to adjust to the new normal by building a hybrid structure. Agusto & Co. believes that this structure gives businesses an advantage by allowing them to benefit from the dependability and convenience of physical locations as well as the accessibility of digital solutions by having both a digital presence and a real address. 

Outlook

Nigeria’s emigrant base is currently skewed towards the economically productive middle-class demographic, which is positive for remittances and underpins the need to devise strategies targeted at this age group to ensure the sustainability of remittances. However, given the significant contribution of students to the emigrating population, Agusto & Co. expects a surge in remittance inflows in the medium term.

In June 2023, the CBN liberalised the foreign exchange regime, doing away with market segmentation, collapsing all the segments into a single exchange rate window – Investors and Exporters (I & E) Window – and adopted a managed floating exchange rate regime. We believe that the unification of exchange rates would also incentivise remittance inflows through official channels, particularly for investment purposes, as it is likely to improve the FX liquidity position, which would facilitate the repatriation of funds.

Therefore, Agusto & Co. expects remittance flows into Nigeria to rise to about $26 billion by 2025. This will be supported by improved economic conditions in advanced economies.

Given Nigeria’s high poverty rate, which increases reliance on foreign aid, Agusto & Co. also anticipates that the need to finance the basic requirements of dependents to remain the most important element driving remittances in the near to medium term. 

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The rating is due to the Fund Manager’s strong operational track record in the Asset Management industry, driven by well-composed and experienced decision-making committees and qualified, long-serving experts.

FBNQuest Asset Management Limited is one of the largest asset managers in Nigeria, promoting and managing several collective investment schemes and discretionary client portfolios to deliver high-end financial investment products and services.

Agusto & Co. also affirmed the Aa-(f) rating assigned to the FBN Money Market Fund.

The rating is upheld by the Fund’s improved adherence to regulatory requirements, good investment process and low exposure to liquidity and interest rate risks.

The rating also reflects the adequate internal credit assessments conducted on proposed counterparties. The FBN Money Market Fund is a collective investment scheme which was launched in September 2012, and is one of the largest funds amongst publicly listed money market funds, with net assets in excess of ₦157.8 billion as at November 2022.

Speaking on the rating, the Managing Director of FBNQuest Asset Management, Ike Onyia, stated, “We are elated to have been assigned an A+ (IM) and Aa-(f) rating for the FBN Money Market Fund by Agusto & Co. despite the constraints in the macroeconomic environment, we aim to keep providing excellent and high- quality investment services to our clients”.

Agusto & Co is a Pan African leader in credit ratings and credit reports. They have assigned well over 1,500 ratings across various sectors, and their ratings are accepted globally with a wide client base utilizing their ratings as a benchmark to measure business success.

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The Issuer is a Special Purpose Vehicle (SPV) set up by Wema Bank Plc (‘’the Bank’’ or ‘‘the Sponsor’’) for the issuance of debt securities.

Agusto in its latest rating assessment released on Tuesday said it upgraded the rating of Wema Bank Funding SPV Plc’s Series II ₦17.7 billion seven-year fixed rate bond to ‘Bbb+’ as a result of significant improvement on key metrics of assessment. 

‘‘The rating assigned to the bond is hinged on the Sponsor’s upgraded rating of ‘Bbb’ and is a notch higher given that 45% of the bond proceeds was invested in a 13.53%, 7-year Federal Government of Nigeria (FGN) bond and held in the custody of the Joint Trustees,’’ Agusto & Co. stated in the report. 

It further noted that ‘Bbb+’ assigned Wema Bank affirmed the leading financial institution’s improved profitability, satisfactory asset quality and liquidity profile.

‘‘In the unlikely event of a default, this provides some recovery prospects. The upgrade in the rating assigned to Wema Bank reflects its improving profitability metrics, satisfactory asset quality and liquidity profile,’’ the report added. 

Commenting on the report, Mr. Ademola Adebise, Wema Bank’s Managing Director/Chief Executive Officer, stated: ‘‘Wema Bank welcomes with excitement this latest positive assessment. This important rating adds to the series of positive outlooks that credible independent global ratings agencies have given to our bank which affirms the resilience of our bank as a stable financial institution. We are buoyed by these positive affirmations to recommit delivering innovative banking and financial solutions that foster inclusive growth for individuals and businesses, and more importantly pushing further Wema Bank’s frontiers as a major enabler of national economic growth.’’ 

Agusto & Co. explained that the rating validity for the bank subsists up until 10 September 2023, but noted, however, that constraining these positive factors are the elevated operating cost profile, the harsh regulatory environment and prevailing macroeconomic headwinds. 

Wema Bank’s fascinating upward trajectory was acknowledged recently when it emerged as the best performing bank in the first half of year 2022 financial year with a weighted average score of 2.83 points ahead of 12 other banks. The Nigerian banking performance HY 2022 prepared by Nairametrics showed that Wema Bank surpassed others on several key metrics including total asset growth, loan book growth, profit growth, cost-to-income ratio movement, and return on average equity.

In similar vein, global rating agency Fitch affirmed Wema Bank’s Long-Term Issuer Default Rating (IDR) at ‘B-‘ with a Stable Outlook, Viability Rating (VR) at ‘b-‘ and National Long-Term Rating at ‘BBB (nga)’, in July 2022.

Amongst the key rating drivers (KRDs), Fitch stated that Wema’s IDRs were driven by its standalone creditworthiness, as expressed by its VR.

The VR reflects Wema’s small franchise, high credit concentrations, aggressive loan and balance-sheet growth and funding weaknesses.

It also reflected good asset quality and expectation of a significant improvement in capitalisation and leverage, due to a material rights issue due to be concluded by end-2022.

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